The International Monetary Fund has negatively responded to Pakistan's initiative to subsidize electricity for Bitcoin mining, jeopardizing the country's aspirations to become a regional crypto hub.
IMF's Response to Pakistan's Proposals
The IMF rejected Pakistan's proposal to allocate 2,000 megawatts from its surplus of 7,000 megawatts for cryptocurrency mining. The allocation of electricity at rates of 23-24 Pakistani rupees (about $0.08) per kilowatt-hour was viewed by the IMF as potentially leading to market distortions.
Strategy for Establishing a Crypto Hub
This IMF decision comes in the wake of Pakistan announcing the creation of a 'National Crypto Council' to develop a regulatory framework for cryptocurrencies. Former Binance CEO Changpeng Zhao was appointed as a strategic advisor to the council.
Uncertain Prospects for Bitcoin Reserve
Pakistan also announced the establishment of a strategic Bitcoin reserve. Pakistan Crypto Council CEO Bilal Bin Saqib stated that the country is following the U.S. example in creating reserves. However, it remains unclear how many Bitcoins will actually be acquired.
Thus, the IMF's rejection could significantly hinder Pakistan's ambitious plans to develop its crypto industry and mining, leaving the country's future in this market uncertain.
